PCH MUTUALI NSURANCE COMPANY, I

NC., Plaintif f , v. CASUAL TY & SURETY, I NC., Defendant

. UNITED STAT ES DIS TRICT COURT

F OR THE DIS TRICT OF COLUM BIA

Civil Action No. 08-00282 ( CKK)

F INDING S OF F ACT AND C ONCLUSIONS O F LAW

(Nove mber 15, 2010) This action ar ises out of an a lleg ed bre ach of an Administrative Servic es Ag ree ment (the “Ag ree ment”) e ntere d into by and betwe en Plaintiff PCH Mutual I nsuranc e Company , Inc. (“PCH”) and De fenda

nt Casualty

& Sure ty , I nc. (“ CSI ”). A fter r emoving this action from the Superior Court for the District of Columbia, CS Ifiled a [8] Mot ion to Com pel Arbitra tion and Stay Procee dings. F inding that a g enuine issue wa s prese nted as to whe ther the pa rties’ Ag ree ment provides for

mandatory

arbitration of disputes arising out of the Ag ree ment, this Court conducted a

one-da y bench tr ial on the threshold question of a rbitrability . Ba sed on the evidenc e adduc ed at tria l, the Court concludes that CS Ihas fa iled to meet its burden of establishing the exis tence of a ma ndatory ag ree ment to arbitrate . Acc ording ly , the Court shall DENY CSI ’s [8] Motion to C ompel Arbitration and Stay Procee dings. The Court’s Finding s of Fa ct and Conclusions of L aw a re se t forth below. I. P ROCEDURAL BACK GR OUND On J anuar

y 22, 2008, PCH filed a four- count complaint ag ainst CSIin the Superior Court for the D istrict of Columbia (Case No. 08-00499)

. SeeCompl., Docket No. [1-4]. On Februa ry19, 2008, CSI remove d the ca se to this Court, and, on March 7, 2008, f iled a Motion to Compel Arbitration and Stay

Procee dings. SeeDef

.’s Not. of Removal, Doc ket No. [1] ; Def.’ s Mot. to Compel Arbitration and Stay Procee dings, D ocket No. [8]. P CH opposed the motion, CS Ifiled a reply , and PCH filed a sur- reply

. SeePl.’s Mem. in Opp’n to Mot. to C ompel Arbitration and Stay Procee dings, D ocket No. [15]; Def.’s Reply Br . to Pl.’s Opp’n to Def.’ s Mot. to C ompel Arbitration and Stay

Procee dings, D ocket No. [19]; Pl.’s Sur-Reply in Opp’n to Def

.’s Mot. to Compel Arbitration and Stay Procee dings, D ocket No. [22-1]. On August 5, 2008, after

conductinga sea

rchingrevie w of the pa

rties’ re spective submissi ons, this C ourt conc luded that a g enuine issue e x isted as to whether the Ag ree ment provides for

mandatory

arbitration of disputes. See PCH Mut. Ins. Co., Inc. v . Cas. & Sur., Inc. , 569 F. Supp. 2d 67, 69 (D.D .C. 2008). Be cause the makingof an a g ree ment for a rbitration was “in issue,” the Court, c onsistent with the requireme nts of the Fe dera l Arbitration Act, de termined that further

limit ed proc eeding s were nece ssary to determine the arbitra

bility of the pa rties’ dispute. Id. at 77; see also 9 U.S.C. § 4 (“I f the makingof the a rbitration ag ree ment . . . be in issue, the cour

t shall procee d summarily to the trial there of.”) . Acc ording ly , this Court conducte d a one- day

bench tr ial on the threshold question of a rbitrability

. SeeMin. Order (F eb. 3, 2009); Tr. of B ench T rial (F eb. 2, 2009) ( “Tr.” ), Doc ket No. [61]

. Duringthe cour se of the tr ial, the Court hear d live testimony from thre e witnesses a

nd

rec eived doc umentary

evidenc e pre sented by

the par ties. There afte r, CSIand PCH eac h submitt ed propose d Finding s of Fa ct and Conclusions of L aw f or the Court’s c onsideration. See Pl.’s Proposed Finding s of Fa ct and Conclusions of L aw, Doc ket No. [53] ; Def.’ s Proposed Finding s of Fa ct and Conclusions of L aw in Respec t of L imited Trial on Arbitrability , Docke t
2No. [54] . CSI also filed a r ebuttal to PCH’s proposed F indings of F act a nd Conclusions of L aw. SeeDef .’s Resp. to Pl.’s Proposed Finding s of Fa ct and Conclusions of L aw, Doc ket No. [58]

. The matter

is now fully

briefe d and ripe for a djudication.

II. F INDING S OF F ACT 1 After listening to the testimony prese nted at trial, pe rsonally observingthe demea

nor and

cre dibilit y

of the witnesse s, revie wing the evidentiar y rec ord, and ma

king a ll reasona

ble 2 infere nces to be drawn there from in ac corda nce w ith the Fede ral Rules of Evide nce, the Court finds that the following fac ts have be en esta blished by

a pre pondera

nce of the evidenc e: A. The Parties 1. Plaintiff PC H is a “r isk retention g roup” domiciled in the D istrict of Columbia providing insurance cover ag e to assisted living f acilities in Pennsy lvania and ne ighbor ing states. Pl.’s Ex . 4 (Ag ree ment) at 1; De f.’s Ex. I(De c. 10, 2003 L tr. from T. Winch to D. Condon) at CSI 49. 2. Br oadly

speaking , a “r isk retention g roup” is a c orporation or limi ted liability company desig ned to assume a

nd sprea d the liability

exposure of its gr oup members – i.e. , businesses that ar e eng ag ed in similar or re lated fie lds (here , assisted living ser vices). See 15 U.S.C. § 3901(a)(4) . Risk retention g roups provide a vehicle f or businesses that c annot re adily To the extent practica

ble, the Court has attempted to seg reg ate its finding s of fa ct and 1 conclusions of law . Neve rtheless, to the e x tent matters desig nated a s findings of fac t may be considere d conclusions of law , they shall be dee med conc lusions of law. Simi larly , to the extent matters expressed a s conclusions of law ma y be conside red f

indings of f

act, they shall be dee med finding s of fa ct. Ex cept a s specific ally

noted her ein, the Court found the te stimony of ea ch of the three 2 witnesses pre sented at trial – David Condon and James Godfre y , on behalf of CSI , and Jon Har kavy , on behalf

of PCH – to be, as a g ener al matter, c redible. 3obtain insurance on favor able ter ms to essentially

“self- insure their own risk” and obta in acc ess to reinsura

nce ma rkets. Tr. a

t 18:15-18:25 (Condon Test.). 3. Def

endant CSIis an insuranc e wholesa le broke r and insura nce pr og ram mana g er based in Ala

bama a nd operating in appr ox imately thirty -nine states a cross the c ountry . Tr. at 89:8-89:15 (Godfr ey

Test.); Pl.’s Ex . 4 (Ag ree ment) at 1. B. Early Discussion s Su rroun ding Th e Form ation Of PCH 4. The e vents surroundingthe formation of PCH were the subject of a fair a mount of attention at trial, in part be cause PCH was not actually formed until on or a

bout April 29, 2004, when its Articles of

I ncorpor ation wer e filed w ith the D.C. Depar tment of Insuranc e and Securities Regulation, meaningthat PCH was not formed until shortly afte r the a g ree ment containingthe “a

rbitration clause ” now a

t issue was neg otiated and e x ecute d. Tr. at 39:14-39:25 (Condon Test.); Pl.’s Ex . 4 (Agree ment) at 1; Pl.’s Ex . 5 (Article s of Incorpor ation) at CSI 45. 5. Severa l parties, cor porate and individual, had a ha nd in the formation of PCH, but its origins ar e found in pre liminary discussions between James Godfr ey (“G odfre y ”), CSI ’s President and f

ounder, a nd Br ian B arr ick (“ Ba

rrick” ), a r etail insuranc e ag ent oper ating his Personal Care & A ssisted L iving I nsuranc e Center

(“PCAL I C”) out of Pennsylvania. Tr. at 17:11-17:13, 69:4-69:9 (Condon Test.); Tr. at 88:12-89:5 (Godfre y Test.); Pl.’s Ex . 7 (F eb. 20, 2004 E-mail from B . Ba

rrick to D. Condon) at PC H000005. 6. Specifica lly , sometime in 2002 or 2003, Godfre y and B arr ick discussed the difficulties that an a ssisted livi ng fac ility association fa

miliar to Bar

rick wa s having in obtaining satisfac tory

insurance cover ag e. Tr. a t 90:17-90:24 (Godfre y

Test.).

4C. Condon Ent ers The Scene And Anim ates The Form ation Process 7. As a outg rowth of their discussion, Godfre y

arr ang ed for

Ba rrick to spe ak with David Condon (“Condon” ), an insura nce wholesale br oker w orkingfor CSIwho, amongother things, a ssists i n the cr eation of insura nce pr og rams. Tr. at 15:18-16:2, 17:23-18:6 (Condon Test.); Tr. at 89:18-89:22, 90:21-91:3 (Godfre y Test.). 8. At some point in 2003, Condon and Bar rick discussed the possibili ty of cr eating an insuranc e prog ram to better meet the ne eds of a ssisted livi ngfac iliti es. Tr. at 17:23-18:6 (Condon Test.). Condon, who had some prior experienc e with risk re tention gr oups, was first to propose f orming a risk re tention gr oup as a possible insura nce c overa g e alter

native for assisted living fa cilities. Tr. at 17:19-17:22, 18:7-18:12 (Condon Test.). 9. At some unidentified point ear ly on in this process, B arr ick appr oache d Matt Har vey (“H arve y ”), the President of a n association of a ssisted livi ngfac iliti es in Pennsylvania, to deter mine whether

the association’s membership would support the for mation of a risk re tention g roup. Tr. at 72:7-73:1 (Condon Test.). 10. As discussions prog resse d, Condon assumed an important – but by no means exclusive – role in coordinating the f ormation of PCH as a r isk retention g roup for assisted living fac iliti es. Indeed, Condon wa s the self-de scribed “ motivating for ce” in the formation of PCH. Tr. at 66:3-66:14 (Condon Te st.). D. Condon Brin gs Risk Servic es Into The Form ation Process 11. Condon assumed responsibility for e stablishing re lationships with various service providers f

or the futur e PCH – e.g. , vendors, r einsurer s, and third-pa rty administrators. Tr. at 66:3-66:11 (Condon Test.). Most notably , in or about late 2003, Condon re ache d out to non5party

Risk S ervic es, L L C (“Risk Services” ), inviting Risk Services to be come involved in the formation of PCH. Tr. at 30:13-30:25 (Condon Test.). 12. Condon had previously worke d with Risk S ervic es – a c ompany that, amongother things, provide s service s to risk retention g roups ac ross the United States and in of fshore domiciles – in setting up an unr elated r isk retention g roup for intermodal truckingcompanies in California. Tr . at 20:9-20:11, 30:13-30:25 (Condon Test.). 13. On or a

bout November

4, 2003, Condon wrote Mike Rog ers, Pre sident of Risk Service s, enclosingwhat he de scribed a s “a r ather complete pr oposal” for

the formation of PCH. Pl.’s Ex . 2 (Nov. 4, 2003 Ltr. from D. Condon to M. Roge rs) at CS I 47; see also Tr. at 35:23-37:4 (Condon Test.). 14. On or a

bout Dece mber 10, 2003, Risk Services r esponded to Condon’s letter with one of its own, desc ribing , amongother thing s, Risk S ervic es’ a nticipated role in connec tion with the formation of PCH. Def.’s Ex. I(De c. 10, 2003 L tr. from T. Winch to D. Condon); see also Tr. at 37:12-38:1 (Condon Te st.). 15. That role, at least as envisioned by Risk S ervic es, would include se rving as PCH’s Captive Insuranc e Company Manag er, c onsulting with PCH to develop an appr opriate org anizational structure, f acilitating regulatory

approva l of the risk re tention gr oup, actingas a “liaison” be tween PCH and its servic e provide rs in prepa ringthe documents re quired for regulatory

approva l, working with PC H to ensure that it had the re quisite capitalization, and, subsequent to formation, oversee ing inter nal financ ial manag ement and r egulatory compliance

. Def .’s Ex. I (De c. 10, 2003 L tr. from T. Winch to D. Condon) at CSI 55; Tr. at 29:2-29:14 (Condon Test.); Tr. at 99:19-99:24 (Har kavy Test.).
616. I n exchang e for these ser vices, Risk Services a

nticipated re ceivingsome amount of compe nsation, most li kely a per centa g e of the g ross ea rned pr emium pay

ments rec eived by

or on behalf of PCH for liability

insurance cover ag e. De f.’s Ex. I(De c. 10, 2003 L tr. from T. Winch to D. Condon) at CS I 53. The pre cise for m the compensation Ri sk Services e x pecte d is immaterial; all that matters is that Risk Services, like all the pa rties involved, had a

financ ial interest in fa cilitating the f ormation of PCH. E. The Agreement

Between PCH An d CSI 17. Fr om the outset, CSI was e x pecte d to serve a s the Prog ram Administrator f or the future PCH. In acc ordanc e with this ex pectation, on March 31, 2004, CSIand PCH entere d into an Administrative Servic es Ag ree ment (that is, the Ag ree ment), pursua nt to which CSI was to provide program a dminist rative se rvice s for the f uture PCH’s liability

insurance prog rams. Pl.’s Ex . 4 (Ag ree ment) at 1. 18. The Ag ree ment was e x ecute d by Godfre y , on behalf

of CSI , and Ha

rvey , on behalf of PCH. Tr. at 60:2-60:5, 76:7-76:16 (Condon Test.); Pl.’s Ex. 4 (Agr eeme nt) at 7. Although PCH wa s technica lly about a month shy

of incorpor ation at the time the Ag ree ment

was e x ecute d, Har

vey subsequently

beca me the first pre sident of PCH and a membe r of its Boa rd of Dire ctors. Tr. a

t 73:7-73:16 (Condon Test.); Pl.’s Ex . 5 (Article s of Incorpor ation) at CSI 46. I n any event, ne ither par

ty has sug g ested that the A g ree ment is not bindi ng on PCH on thi s basis. 19. As the Prog ram Administrator, CSIwas re sponsible for, amongother thing s, the development, pr epar ation, and issuance of insuranc e policies a nd adher ence to insurance underwriting guidelines. Pl.’s Ex . 4 (Ag ree ment) ¶ 2. 20. At least within the contours of the Ag ree ment itself, in its role as Prog ram 7Administrator, CSI would opera te as a n independe nt contrac tor. Pl.’s Ex . 4 (Ag ree ment) ¶ 2( c). 21. I n exchang e for

its services a s Progr am Administrator, CSIwas e ntitled to som e amount of compe nsation, a fe e tag g ed to the per centa g e of the g ross ea rned pr emium pay

ments

rec eived by

or on beha lf of PCH for liability insurance cover ag e. Pl.’s Ex . 4 (Ag ree ment) ¶ 8. Ag ain, the pre cise for

m the compensation CS I

expected is immaterial; all that matters is that CSI , like all the par

ties involved, had a f

inancial inter est in fac ilitating the for mation of PCH. 22. The pa

rties’ c ontrac tual relationship was, absent fur ther a ction, desig ned to be ten y ear s in duration; the Ag ree ment would expire by its terms on March 31, 2014. Pl.’s Ex. 4 (Ag ree ment) ¶ 1. 23. Three specific provisions of the Ag ree ment merit furthe r attention her e. F irst, Parag raph 17 of

the Ag ree ment (the “ Arbitration Clause” ) – the locus of the par ties’ disag ree ment at this stage of the proc eeding s – provides as f ollows: 17. Arbitrat ion. Any disputes c oncer

ning any aspec t of this Ag ree m ent may be submitt ed to binding arbitration. The preva iling part y s h all be entitled to rec over all costs incurr ed, including rea sonable attorney ’s fe es. Pl.’s Ex . 4 (Ag ree ment) ¶ 7. 24. Second, Para g raph 14 of the Agree ment (the “ Injunction Clause”) pr ovides as follows: 14. Injun ction. In the ev en t that [C SI ], its employ ees, ag ents, broker s and/or representatives, attempt to brea ch the t erms of this Ag ree ment, [P CH] shall, in ad d i t ion to its rig hts and reme dies available to it at law or in equity , have the rig ht to seek an injunction ag ains t [ CSI ] to enfor ce the provisions of this Ag ree ment. [C SI ] agr ees to be responsible for and to reimburse [P CH] for any attorney ’s fee s and costs

8associate d with any leg al action taken by [P CH] to enfor ce the terms of this Ag ree ment. Pl.’s Ex . 4 (Ag ree ment) ¶ 14. 25. Finally

Parag raph 23 of the Ag ree ment (the “ Savings Clause ”) pr ovides as

3 follows: [23]

. P artial Validity. I f any term or provision of this Ag ree ment or the application there of to any person or circ ums t an ce shall to any exten[ t] be invalid or un en fo rc eable , the rema inder of the Ag ree ment . . . shal l not be aff

ecte d there by , and eac h term and provision of t h e Ag ree ment shall be enfor ced as written to the fullest extent permitted by law. Pl.’s Ex . 4 (Ag ree ment) ¶ 23. F. Drafting The Agreem ent: The Lim ited Involvement Of The Signatori es 26. Moving ba ckwa

rds in time, the evidenc e pre sented at trial conce rning the dra fting of the Ag ree ment betwee n CSI and PCH was fa r fr om illum inating. T his is particularly true with respe ct to the Arbitration Cl ause, which was indisputably not the subject of much, if any , attention by

the par ticipants in the draf

ting pr ocess. 27. As an initial matter, the r ecor d is nearly devoid of e vidence conce rning the thought pr ocesse s and intentions of the only two signa

tories to the Ag ree ment – namely , Godfre y and Ha rvey . 28. Godfre y

had little personal involvement in the pr epar ation of the Ag ree ment

The fina l six para g raphs of the Ag ree ment are misnumbered, with the par ag raph 3 following Parag raph 19 e rrone ously labeled a s Paragraph 16. A s labeled, the Ag ree ment has two eac h of par ag raphs number ed 16, 17, 18, and 19. F or ea se of r efe renc e, the Court shall re fer to the first set of pa

ragraphs so-numbe red a s Parag raphs 16 through 19, and shall re fer to the misnumbered par ag raphs a s if they had bee n sequentially

numbere d – i.e. , as Para g raphs 20 throug h 25. 9betwee n CSI and PCH; his participation was esse ntially limit ed to the ea

rly discussions surroundingthe formation of PCH, his execution of the Agree ment on CSI ’s beha lf, and his extension of a $130,000 loan to PCH to ensure that it would have suf ficient c apital for its formation. Tr. a

t 90:12-91:24 (Godfre y

Test.). 29. Godfre y

testified that, prior to sig ning, he revie wed the A g ree ment, including the Arbitration Clause, a

nd that CSI g ener ally

“look[s] for a

n arbitration ag ree ment to be” include d in insurance ag ree ments. Tr. at 93:6-93:10, 93:17-93:18 (Godf rey Test.). He also testified that he re viewed the I njunction Clause, and that, althoug h unclea r as to its meaning , he assumed that it did not pertain to CS I

and did not aff

ect the A rbitration Clause. Tr. at 95:13-95:17 (Godfre y Test.). 30. Godfre y ’s re latively cursor y testimony , admittedly

predic ated upon his “br ief[] ” perusa l of the Ag ree ment, Tr. at 93:9-93:10 (G odfre y Test.), did not addre ss the specific lang uag e of the Arbitration Clause or the Injunction Clause nor tie his proff ere d interpre tation to any discussions with P CH or any of its repre sentatives (or

even w ith CS I ’s re prese ntative in the draf ting pr ocess, Condon). As a result, the Court finds Godfr ey ’s g ener alized testimony only minimally

probative of

the par ties’ under standing of the Agree ment. Neve rtheless, the Court shall consider G odfre y ’s testimony to the extent it may

ref lect CSI ’s one- sided interpre tation of the Arbitration Cl ause. 31. Meanwhile, the re cord ha s nothing spec ifically to say of Ha rvey ’s under standing of the Ar bitration Clause (or, f

or that matter, a

ny part of the Ag ree ment), as ne ither CSInor PCH soug ht to introduce any

testimony

or evide nce f

rom Har vey , the sig natory

on PCH’s behalf.

10G. Drafting The Agreem ent: The Lim ited Involvement Of PCH 32. Not only

did the parties f

ail to cultivate the re cord w ith respec t to Harve y ’s understandingof the Agree ment betwee n CSI and PCH, but they neg lected to introduc e any rele vant testimony

or evide nce c oncer

ning the participa

tion of anyoneactingon behalf of the future PCH in the proc ess of dra fting the Ag ree ment. 33. Notably , Condon admitted, consistently with the other e vidence prese nted at trial, that he did not view Risk Services a s neg otiating on be half of PCH in the conte x t of draf ting the Ag ree ment. Tr. at 85:11-85:20 (Condon Te st.). 34. Moreove r, to the extent Condon’s testim ony may be construe d as sug g esting that Ba rrick should be viewed a s repr esentingthe future PCH in t he cour se of dr aftingthe Ag ree ment betwee n CSI and PCH, Tr. at 72:3-72:9, 72:23-73:1 (Condon Test.), the Court does not cre dit the sug g estion for two re asons. Fir st, the sugg estion is in som e, albe it not irreconc ilable, tension with Condon’s testimony that Ba rrick se rved a s the ag ent for the assisted living a ssociation of which Ha rvey was Preside nt. Tr. at 74:21-74:25, 78:25-79:4 (Condon Test.). Sec ond, and more importantly , the sug g estion is unsupported and in fa ct re butted by counter vailing doc umentary evidenc e indicatingthat Ba rrick’ s (or, more prec isely , PCAL I C’s) role vis-à -vis the future PCH was to ser ve as its Marke ting Dir ector , Pl.’s Ex . 7 (Dra ft Marke ting Agree ment) at PCH000006- 000013, and in that ca

pacity would function as PCH’s “r epre sentative” no more than CSI , as the future PCH’s Prog ram Administrator, or Risk S ervic es, as the f

uture PCH’s Captive Insuranc e Company Manag er. At bottom, the recor d does not support the infer ence , by a pre pondera

nce of 4

I n a dra ft of a pr oposed indepe ndent marke ting a g ree ment betwee n PCAL I C and PCH, 4 PCAL I C was, like CSI , char acte rized as an “ independe nt contrac tor,” Pl.’s Ex. 7 (Draft Marke ting Agree ment) ¶ 2( e), a nd it was anticipate d that PCAL I C would rece ive some for m of 11the evidenc e, that B arr ick was ne g otiating on be half of PCH in the conte x t of draf ting the Ag ree ment. 35. More br oadly , the pre cise nature of the relationship of the three pr incipal entities involved in the formation proc ess – CSI , Risk S ervic es, and PCAL I C – to the future PCH is ultimately

immaterial; rathe r, what is significa nt is that all three (a

nd perha ps other ser

vice providers) wer e jointly

workingtowards the f

ormation of PCH. As Condon himself testified, afte r re cog nizi ngan unmet nee d in the marke t, CS Iand “the se other se rvice providers [set] about

cre ating a client.” Tr. at 77:11-77:15 (Condon Te st.). 36. I n any

event, it is undisputed that, while Ba rrick ma de cha

ng es to an indepe ndent marke ting a g ree ment betwee n his ag ency and PCH, he off

ere d no commentar

y or cha ng es to the Ag ree ment betwee n CSI and PCH. Tr. at 41:19-41:25, 80:10-80:12, 80:21-80:24 (Condon Test.); Pl.’s Ex . 7 (F eb. 20, 2004 E-ma il from D. Condon to T. Wi nch) at PC H000005. Acc ording ly , even if

there wer e some c rede nce to Condon’s sug g estion that Ba rrick w as somehow re prese nting PCH in the course of neg otiations, there still would be no evide nce on the

rec ord establishing the under standing or intentions of PCH in ex ecutingthe Ag ree ment H. Drafting The Agreem ent: The Involvement Of CS I And R isk Services 37. The a

bsence of evide nce r elatingto the participation of Harve y and PCH is unsurprising , g iven that the Ag ree ment betwee n CSI and PCH was just one of se vera l documents prepa red in the c ourse of

formingPCH, and rec eived little attention from anyone. Howe ver, to the extent there is any

evidenc e on the r ecor d conce rning the dra fting of the Ag ree ment, it relates

compensation in ex chang e for its services a s Marke ting Dir ector to the future PCH, most likely a perc entag e of the g ross ea rned pr emium pay

ments rec eived by

or on beha lf of PCH for liability insurance cover ag e. Id. at ¶ 3. 12principally to Condon, acting on behalf of CSI , and var ious employ ees of Risk S ervic es. 38. Be g inning in or a

bout Febr uary 2004, Condon and employ ees of Risk S ervic es exchang ed a se ries of e -mails conce rning the Ag ree ment. The two princ ipal fig ures f rom Risk Service s involved in the prepa ration of the A g ree ment betwee n PCH and CSI wer e Troy Winch (“Winch”) , Risk S ervic es’ Dir ector of Captive Servic es, who he ld the primary responsibility within Ri sk Services f

or coor dinating the formation of PCH, and Jon Harkavy (“H arka vy ”), Risk Service s’ Executive Vice President and Ge nera l Counsel. Tr. at 22:18-22:21, 43:24-44:2 (Condon Test.); Tr. at 98:3-98:9, 106:22-107:2, 112:24-113:5 (Harka vy Test.). 39. Although Condon testified that he did not have the a uthority to exercise “f

inal approva l” of the A g ree ment on behalf of CSI , he neve rtheless ha d the authority and re sponsibili ty to, and in fac t did, make cha ng es to the Ag ree ment on CSI ’s beha lf. Tr. at 66:22-67:8, 67:21- 67:23 (Condon Test.). 40. Condon’s proposed c hang es to the Ag ree ment, direc ted exclusively towards modifying the provisions gove rning CSI ’s compensation and identify ing the proper

corpor ate name f or CSI , wer e ultimately

incorporated into the final ver sion of the Ag ree ment. Tr. at 28:15- 29:1, 53:8-53:25 (Condon Test.); Tr. at 102:9-102:14, 126:15-127:1 (H arka vy Test.); compare Pl.’s Ex . 17 (Dra ft Ag ree ment) ¶ 8, with Pl.’s Ex . 4 (Ag ree ment) ¶ 8. 41. Apar

t from some super ficial e dits that Harkavy may or may not have made to the Ag ree ment betwee n CSI and PCH, Tr. at 102:4-102:6 (H arka vy Test.), Condon was the only individual to sugg est cha

ng es to the Ag ree ment. 42. Condon’s edits were rela tively minor, and did not touch upon any of the provisions releva

nt to the motion now before the Court. I n fac t, even Ha rkavy descr ibed Condon

13as “pa ssive” in hammer ing out the te rms of the Ag ree ment betwee n CSI and PCH, Tr. at 107:8-

108:2 (Har

kavy Test.), a descr iption entirely

consistent with all the evidenc e on the r ecor d indicating that no one dedic ated much a ttention to the Agr eeme nt, let alone the Ar bitration Clause. I. Drafting The Agreem ent: The Arbitrat ion C lause An d The Inju nction C lause 43. Condon credibly

testified that he r ead the entire A g ree ment. Tr. at 60:6-60:8 (Condon Test.). How ever , Condon did not alter the Ag ree ment’s Arbitration Cl ause or the I njunction Clause. Compare Pl.’s Ex . 17 (Dra ft Agree ment) ¶¶ 14, 17, with Pl.’s Ex . 4 (Ag ree ment) ¶¶

14, 17. 44. Condon testified that he did not “pa[y ] a gr eat de al of attention” to the I njunction Clause, but stated that he did not see any inconsistency

betwee n it and the Arbitration Cl ause. Tr. at 60:12-61:10 (Condon Te st.). Condon’s understandingof the re lationship between the two provisions was that, in order to compel CSI to perfor

m under the A g ree ment, PCH could resort to injunctive relief

; all other disputes would be re solved by arbitration. Tr. at 63:8-63:18 (Condon Test.). 45. Critically , howeve r, Condon did not reca ll any conver sation or discussion among the par ties (or e ven betwe en the pa rties and non- party

Risk S ervic es) with re spect to the Arbitration Clause or

the Injunction Clause. Tr. at 56:12-56:14 (Condon Te st.). Condon

conce ded that those provisions wer e included in the f inal version of the Ag ree ment beca use they

wer e par t of an e ntirely

separ ate a g ree ment discussed in g reater de tail below. Tr. at 56:15-56:17 (Condon Test.). 46. Consist ent with Condon’s testimony , none of the corr espondenc e conc erningthe

14draf

ting of the Ag ree ment makes spec ific re fer ence to arbitration or the Arbitration Clause. Pl.’s Ex . 2 (Nov. 4, 2003 Ltr. from D. Condon to M. Roge rs), Ex. 6 (Fe b. 18, 2004 E-mail from D. Condon to T. W inch), Ex. 7 (Fe b. 20, 2004 E-mail from D. Condon to T. Winch), Ex. 8 (Feb. 23, 2004 E-mail from D. Condon to T. Winch), Ex. 9 (Mar. 16, 2004 E-ma il from T. Winch to D. Condon), Ex . 11 (F eb. 24, 2004 E-ma il from D. Condon to T. Wi nch), Ex. 12 (Mar. 8, 2004 Email from D. Condon to T. Winch), Ex . 13 (Mar . 8, 2004 E-mail from D. Condon to T. Winch), Ex . 14 (Mar . 16, 2004 E-mail from D. Condon to T. Winch), Ex. 15 (Mar. 16, 2004 E-ma il from D. Condon to T. Wi nch), a nd Ex . 16 (Mar . 17, 2004 E-mail from D. Condon to T. Winch). 47. Meanwhile, Har

kavy could not even te stify

definitively

whether he wa s awa

re at the time that the Ag ree ment was e x ecute d that it contained an a rbitration provision, explaining that “it was not a subjec t of g reat attention” for him. Tr. at 102:19-102:22 (Har kavy Test.). 48. I n any

event, Ha

rkavy descr ibed his role as limited to ensuringthat the Ag ree ment betwee n CSI and PCH would past regulatory muster; in his own words, he played no “substantive role ” in cr aftingthe terms of the Ag ree ment. Tr. at 105:20-106:7 (H arka vy Test.). The Court there fore acc ords little weig ht to his t estimony that he under stood that the Arbitration Clause was pe rmissive rather than mandator

y , and that the pr ovision merely allocate d the costs in the eve nt the parties pr ocee ded to ar bitration. Tr. at 108:25-109:15 (H arka vy Test.). The testimony is, moreover , of little import in l ight of the undisputed fac t that Risk S ervic es is not a party to the Ag ree ment and Condon’s admission that he did not view Risk Services a s neg otiating on be half of the future PCH. Tr. a t 85:11-85:20 (Condon Test.). J. Drafting The Agreem ent: Cann ibalizi ng The Int

erm odal Agreem ent 49. The re cord is cle ar: nobody dedicated much attention to the Agree ment betwee n

15CSI and PCH; there we re no c ontemporane ous discussions concer ning the Arbitration Clause or the Injunction Clause; and the only materia l evidence havingany bear ing upon e ither provision relates only

to CS I ’s profe ssed under standing , which wa s never conveyed, in sum or in substance, to PCH or any of its repre sentatives prior to e x ecution of the Ag ree ment. As such, based upon the rec ord cr eate d by the par ties, the Court’s ability

to draw a ny infere nces a s to what the par ties intended by

the languag e they

selec ted in the Arbitration Cl ause is seve rely circ umscribed. At be st, the rec ord per mits t he Court to conclude that CSI understood the Arbitration Clause to re quire mandatory arbitration of all disputes arising out of the Ag ree ment, though e ven the e vidence to that effe ct ( i.e. , Godfre y and Condon’s testimony) is not particular ly compelling . Apar

t from the contr actua l lang uag e itself, the Court has no ba sis for dra wing conclusions as to PCH’s understandingof the Ar bitration Clause or to what e x tent there was a share d understandingbetwee n CSI and PCH. 50. Recog nizi ng this, and appar ently with an ey e towar ds invoking the doc trine of contra proferentem , the par ties dedicated the majority of their attention at trial to identify ing the orig ins of the languag e that ultimately came to form the Ag ree ment betwee n CSI and PCH. 51. Prior to the formation of PCH and the dr aftingand execution of the A g ree ment, CSI (more spe cifica lly , Condon) was involved in setting up an unre lated risk re tention gr oup for intermodal truckingcompanies in California . Tr. at 19:1-19:17 (Condon Te st.). Tog ether with Risk S ervic es, who wa s broug ht into the process by a re tail insurance ag ent oper ating in California, CSIparticipated in a similar proc ess of for ming a risk rete ntion gr oup for these intermodal truckingcompanies. Tr . at 19:14-19:17 (Condon Test.). It is undisput ed that PCH had no involvement whatsoever in this proce ss.

1652. As part of that transac tion, an Administrative Service s Ag ree ment was c reated to g overn the relationship between the r isk retention g roup and CSI , as the insura nce pr og ram administrator (the “ I ntermodal Ag ree ment”). Tr . at 20:12-20:15 (Condon Test.); De f.’s Ex. 10 (Intermodal Ag ree ment) at PCH000042-000048. As desc ribed be low, the I ntermodal Ag ree ment beca me the starting

point (and, with minor exceptions, the ending point) for the pr epar ation of the Ag ree ment betwee n CSIand PCH. Most im portantly , the ar bitration and injunction clauses in the I ntermodal Ag ree ment rea ppear ed ver

batim in the Ag ree ment betwee n PCH and CSI . Tr. at 26:2-26:6, 28:10-28:14 (Condon Test.); compareDef .’s Ex. 10 (I ntermodal Ag ree ment) ¶¶ 14, 17, with Pl.’s Ex . 4 (Ag ree ment) ¶¶ 14, 17. 53. The pa

rties’ disag ree ment here extends to t wo questions: first, who was responsible for

draf ting the I ntermodal Ag ree ment in the context of that transac tion; and, second, how the Intermodal Ag ree ment later c ame to be use d as the ba se for the Ag ree ment betwee n CSI and PCH. On the first question, the Court finds that the orig ins of the languag e used in the I ntermodal Ag ree ment are indeterminate . On the sec ond, the Court finds that Risk S ervic es wa s the first to sug g est using the I ntermodal Ag ree ment as a te mplate of sorts for the Ag ree ment betwee n CSI and PCH, and that CSI , throug h Condon, sanctioned its use. Critically , PCH had no role e ither in draf

ting the or igina l I ntermodal Ag ree ment or in importing its terms into the Ag ree ment betwee n it and CSI

. 54. Be g inning with the f irst question, no evidence introduced a t trial established the provena nce of the Intermodal Ag ree ment, let alone the a rbitration clause in that ag ree ment. True, Condon chara cter ized Ri sk Services a s “the sourc e” of the I ntermodal Ag ree ment. Tr. at 23:7- 23:14 (Condon Test.). Howe ver, Condon testified that “ a combination of pe ople” c reated the

17I ntermodal Ag ree ment, with responsibility for the “ technica l details” fa lling to Risk Services. Tr. at 20:23-21:3 (Condon Test.). He further conce ded that he ha d no understanding as to the orig ins of the Intermodal Ag ree ment. Tr. at 85:2-85:4 (Condon Te st.). Indeed, he testified that he wa s

never told who drafte d the Intermodal Agree ment, and only speculated that Risk Services “c ould have g otten it out of a form book.” Tr. at 29:16-29:18, 31:20-31:22, 34:9-34:12, 35:1-35:18 (Condon Test.). 55. At the same time, Condon’s testimony that his own involvement in prepar ing the I ntermodal Ag ree ment was limited, and did not ext end to the cr aftingof the a rbitration clause , is unrebutted. Tr . at 25:20-26:1 (Condon Test.). Condon re prese nted that his role in dra fting the I ntermodal Ag ree ment was limited to supply ing the corpor ate name of CSIand modifying a provision pertainingto CS I ’s maintenanc e of c erta in financia l rec ords, Tr. at 20:16-20:20, 29:16- 29:21, 65:20-65:23 (Condon Test.), testimony that is consistent with contemporane ous

corr espondenc e, Pl.’s Ex . 21 (Nov. 5, 2003 E- mail from D. Condon to J . Har kavy ) at PCH000133. 56. Har

kavy ’s testimony

was e ntirely

consistent with Condon’s acc ount. Harka vy was for thrig ht in conceding

that he wa s awa

re of no fac ts sugg esting that the languag e for the I ntermodal Ag ree ment orig inated with Condon or CSI . Tr. at 114:16-114:20 (H arka vy Test.). Meanwhile, althoug h Har kavy testified that he maintains a stock of var ious ag ree ments and documents helpful in for

ming a risk rete ntion gr oup, and that he some times makes those ag ree ments and docume nts available to c lients and law fir ms, Tr. at 100:3-100:11 (Ha rkavy Test.), the Court c redits his testimony that he did not know who dra fted the I ntermodal Ag ree ment, and that it may have be en a “ template fr om another f orm,” Tr . at 100:21-101:6,

18125:1-125:4, 125:23-126:14 (Har kavy Test.); see also Pl.’s Ex . 8 (F eb. 23, 2004 E-ma il from T. Winch to D. Condon) at PC H000018. 57. Fr om this evidence, the Court’s conclusions ar e nec essar ily limit ed: first, Condon, though a participa nt, was not the sole dra ftsman of the I ntermodal Ag ree ment or its arbitration clause ; and sec ond, Risk S ervic es may or may not have supplied the initial draf t of the I ntermodal Ag ree ment or base d its contents on a form it obtained f rom other sourc es. B ut most signific ant for the resolution of the issues now be fore the Court, it is undi sputed that PCH had no role in dra fting the Intermodal Ag ree ment or its arbitration cla use. 58. Turningto the second que stion, the recor d is more illuminating in asce rtaining how the Intermodal Ag ree ment later c ame to be use d as the ba se for the Ag ree ment betwee n CSI and PCH. I n short, Risk S ervic es first sug g ested, a nd CSI subsequently

sanctioned, the use of the I ntermodal Ag ree ment as a star ting point for the Ag ree ment betwee n CSI and PCH. Ag ain, PCH had no role in the matter. 59. On Fe bruar

y 20, 2004, Condon wrote Winch, Risk S ervic es’ Dir ector of Captive Resource s, reque sting a

“dra ft copy

” of the prog ram a dminist rator a g ree ment – i.e. , the ag ree ment betwee n PCH and CSI . Pl.’s Ex . 8 (F eb. 20, 2004 E-ma il from D. Condon to T. Winch) at PCH000019. W inch re sponded by sug g esting that, if CSIwas g oing to pr ovide similar service s to PC H as it did for the inter modal truckingrisk rete ntion gr oup, “it make[s] sense to use that as a

base f or the CSIag ree ment, g iven that both [C SI ] and [ regulatory authorities] have used/seen that ag ree ment.” Pl.’s Ex . 8 (F eb. 20, 2004 E-ma il from T. Winch to D. Condon) at PCH000019; see also Tr. at 79:21-80:2 (Condon Te st.). 60. Condon ag ree d, Tr. at 44:11-44:12 (Condon Te st.), and Winch subsequently

19forwa

rded the I ntermodal Ag ree ment to him, P l.’s Ex . 9 (Mar . 16, 2004 E-mail from T. Winch to D. Condon) at PCH000038; Tr. at 45:6-45:7 (Condon Test.). The re is no sug g estion, nor does the re cord suppor

t the infere nce, that Risk S ervic es made any chang es or e dits to t he Intermodal Ag ree ment prior to forw ardingit to C ondon. Tr. at 67:13-67:15 (Condon Te st.). 61. Condon was satisfied with the for m of the Intermodal Ag ree ment and at f irst made no attempt to tailor its terms to the transaction betwe en CSIand PCH. Pl.’s Ex . 11 (F eb. 24, 2004 E-mail from D. Condon to T. Winch) at PCH000021; Pl.’s Ex . 12 (Mar . 8, 2004 E-mail from D. Condon to T. Winch) at PCH000023; Pl .’s Ex. 13 (Mar. 8, 2004 E-mail fr om D. Condon to T. Wi nch) at PC H000029; Tr. at 47:12-47:18, 48:17-48:20 (Condon Te st.); Tr. at 101:14- 101:16 (Har

kavy Test.). 62. Howeve r, Risk service s subsequently flag g ed ce rtain ministerial err ors in the dra ft Ag ree ment. Tr. at 86:12-87:2 (Condon Te st.). Specifica lly , on Marc h 16, 2004, Winch wrote Condon, noting that the ve rsion of the Ag ree ment then beingconsidere d still ref lected te rms applicable only

to the I ntermodal tra

nsaction. Pl.’s Ex . 14 (Mar . 16, 2004 E-mail from T. Winch to D. Condon) at PCH000034; Tr. at 51:16-52:3 (Condon Test.). Condon re sponded, “I g uess I didn’t pay

as much attention to it as I thought I did.” Pl.’s Ex . 15 (Mar . 16, 2004 E-mail from D. Condon to T. W inch) at PC H000037; Tr. at 52:13-52:24 (Condon Te st.). 63. There afte r, on Mar ch 17, 2004, Condon wrote Winch attac hing a draf t of the Ag ree ment, incorpora

ting his cha

ng es fr om the I ntermodal Agree ment, and re commendingthat the dra ft be used f

or the a dminist rative se rvice s ag ree ment betwee n CSI and PCH. Pl.’s Ex . 16 (Mar . 17, 2004 E-mail from D. Condon to T. Winch) at PCH000051; Tr. at 54:1-54:4 (Condon Test.). Ag ain, those cha

ng es did not relate to the Arbitration Clause or the Injunction Clause.

2064. Ba sed on the testimony and docume ntary

evidenc e pre sented at trial, the Court finds that it was Risk S ervic es that first propose d using the I ntermodal Ag ree ment as a te mplate for the A g ree ment betwee n CSI and PCH, but that Condon, on behalf of CSI , sanctioned a nd endorse d its use. K. Custom And Practice Evidence 65. Finally , the par

ties also soug ht to introduce evide nce a t trial conce rning the broade r use of

arbitration provisions i n the insuranc e industry , as we ll as in the more spec ific context of ag ree ments g overningthe formation of risk retention g roups. In this reg ard, CSI 5 offe red the testimony

of Condon and Godf

rey , while PCH relied upon Ha rkavy ’s testimony

. 66. Over

the cour se of his ca

ree r, Condon has obtained a pproxi mately

six insurance desig nations, including Cer tified Property

and Casualty

Under writer a nd Reg istered Profe ssional L iability Under writer. T r. at 16:8-16:11 (Condon Te st.). Condon considers himself to be a n “expert” in the insura

nce industry . Tr. at 37:9-37:11 (Condon Te st.). He is also a lice nsed attorney and a me mber in g ood standing of the California bar. Tr . at 16:18-16:24 (Condon Test.). 67. Substantively , Condon testified that ag ree ments with standard insura nce c arr iers “invar iably ” include a

rbitration clause s. Tr. at 83:11-83:19 (Condon Te st.). Howeve r, Condon’s g ener alized testimony

did not address the nature of those arbitration clauses or, f or that matter, Although the term “e x pert” was oc casiona lly deploy ed by

the par ties, both sides 5 eff ectively relied on the testimony

of lay witnesses. The Court ha s considere d such testimony to the extent it was rationally based upon the witnesses’ obse rvations and pe rsonal knowledg e. See Fe d. R. Evid. 701; cf. Medina v . District of Columbia , __ F. Supp. 2d __, 2010 WL2473700, at *19 (D.D.C. June 18, 2010). The Court nee d not belabor the point; reg ardle ss of how the testimony is chara cter ized, the Court finds that there is insufficie nt rec ord support to establish a discernible c ustom and prac tice as to the use of ar bitration clauses in this context. 21the nature of ag ree ments involving standar d insurance car riers a nd their re lationship to ag ree ments involving risk re tention gr oups. Nor did Condon articulate how the languag e of suc h clause s compare or contra st to the lang uag e at issue in this case . Moreove r, Condon admitted that he has only

been involved in the c reation of two risk retention groups – the one involving intermodal truckingcompanies in California and the one at issue her e. Tr. at 82:25-83:5 (Condon Test.); see also Tr. at 90:8-90:11 (G odfre y Test.). In eac h case , the ar bitration clause was subjec t to the same ambig uity . For these re asons, whethe r consider ed tog ether or independe ntly , the Court finds Condon’s testimony is entitled to li ttle weig ht in ascer taining whether there is a custom or pra ctice a s to the use of mandatory arbitration clauses in this context. 68. Godfre y , the President and f ounder of CSI , has worke d in the insurance business for ove r thirty -five year s. Tr. at 88:12-89:5 (G odfre y Test.). Dur ing that period, he ha s formed various insuranc e-r elated e ntities, including his own ag ency in 1997, a ca

rrier in 1989, and CSI in 1999. Tr. at 88:22-89:5 (G odfre y Test.). 69. Godfre y

testified that ar

bitration clauses a

re “ very standard” in ag ree ments with insurance car

riers, a nd char acte rized arbitration as “a standa rd in the industry ,” par

ticularly wher e parties e nter into long -term r elationships. Tr. at 93:11-94:2 (Godf rey Test.). He further

testified that “eve ry

[agr eeme nt] that [he has] ever see n had [an arbitration ag ree ment] i n there .” Tr. at 93:18-93:19 (Godfr ey

Test.). As wa s the ca se with Condon, Godfre y ’s testimony related to the insurance industry

as a whole, and did not spec ifically addre ss ag ree ments involving risk rete ntion gr oups, with which he a dmittedly has minimal ex perie nce. T r. at 90:8-90:11 (G odfre y Test.). Godf

rey did not specify

whether the alleg ed industry

standard w as per

missive or

22mandatory arbitration, nor did he articulate how the languag e of the se cla uses compar e or contra st to the lang uag e at issue in this case . For these re asons, whethe r consider ed tog ether or independe ntly , the Court finds Godfre y ’s testimony to be minimally

probative of

whether there is a custom or pr actice as to the use of mandatory

arbitration clauses in this context

. 70. Har

kavy is the Ex ecutive V ice Pre sident and Ge nera l Counsel of Risk S ervic es, positions he has held for a pproxi mately

twenty y ear s. Tr. at 98:3-98:9 (H arka vy Test.). Ha

rkavy testified that he ha s seen at least fifty risk rete ntion gr oup ag ree ments over the c ourse of his

car eer , and that ther e is no standar d as to the inclusion or conte nt of arbitra tion clauses in such ag ree ments. Tr. at 104:17-105:4, 117:10-117:18 (Ha rkavy Test.). When pre ssed, Har kavy was unable to provide an estimate a s to what perc entag e of suc h agree ments contain ar bitration clause s. Tr. at 105:11-105:14 (H arka vy Test.). Ha

rkavy also testified that most arbitration provisions in insurance c ontrac ts are mor e deta iled and expansive than the one at issue in this action, and f

reque ntly delineate proce dures f

or commenc ing a

nd conducting

arbitration proce eding s. Tr. at 103:20-104:16 (H arka vy Test.). 71. The Court finds that Ha rkavy ’s somewhat more spec ific testimony is entitled to some, but not substantial, weig ht. Howeve r, eve n absent Ha rkavy ’s testimony , the Court would find – as it does now – that the r ecor d simply does not establish, by

a pre pondera

nce of the evidenc e, that ther e is a c ustom or prac tice of usingmandatory arbitration clauses either in the risk rete ntion gr oup context or the broade r insuranc e industry

.

23III. CONCLUSIONS OF LAW

Ba sed upon the for eg oing F indings of F act, the Court make s the following Conclusions of L aw: 1. The F eder al Arbitration Act (“F AA”) provides that “[a] written provision in any . . . contra ct evidenc ing a

transac tion involvi ng commerc e to settle by arbitration a controve rsy there afte r ar ising out of suc h contra ct . . . or the r efusa l to perfor m the whole or a

ny part ther eof . . . shall be valid, irre vocable , and enf orce able, save upon such g rounds as e x ist at law or in equity for the r evocation of any contra ct.” 9 U.S.C. § 2. Where a district court is satisfied that an issue is ref

era ble to arbitration under a written ag ree ment, it must “stay the trial of the a ction until such arbitration has be en had in a ccor dance with the terms of the a g ree ment.” 9 U.S.C. § 3. I n this reg ard, the FAA“lea ves no plac e for

the exercise of

discretion by

a district cour

t, but instead mandates that district courts shall direc t the parties to proc eed to a rbitration on issues as to which an a

rbitration ag ree ment has bee n signe d.” Dean W itter Reynolds, Inc . v. By rd , 470 U.S. 213, 218 (1985) (e mphasis in origina l). 2. Deter

mining whe ther a

contra ct indicates a

n ag ree ment to arbitrate is ty pically a task for the courts, rather than a rbitrators. See Howsam v. De an W itter Reynolds, Inc

. , 537 U.S. 79, 84 (2002) ( “a g atewa

y dispute about whethe r the pa rties ar e bound by

a g iven ar

bitration clause raises a

‘question of a

rbitrability ’ for

a cour t to decide.” ). 3. As the Supreme Court ha s emphasized, the FA A “strong ly favor s the enfor ceme nt of ag ree ments to arbitrate as a me ans of se curing‘prompt, ec onomical and a dequate solution of controve rsies,’” Rodriguez de Quijas v. She arson/Am. Express, Inc

. , 490 U.S. 477, 479-80 (1989) ( quoting a

nd overr uling W ilko v. Swan , 346 U.S. 427, 438 (1953)), a nd require s that

24courts “r igor ously enfor ce a g ree ments to arbitrate ,” Byrd , 470 U.S. at 217. I n acc ordanc e with this salutary

statutory purpose, whe re a

n ag ree ment contains a va lid arbitration clause , “any doubts conce rning the scope of ar bitrable issues should be re solved in favor of ar bitration,” Moses H. Cone M

em’ l Hosp. v. Me rcury Constr. Corp. , 460 U.S. 1, 24-25 (1983), a nd “an or der to arbitrate [a] particula

r g rieva nce should not be de nied unless it may be said with positive

assura nce that the arbitration clause is not susceptible of a n interpre tation that cover s the asser ted dispute,” AT & T Techs., Inc. v . Commc’ns W orkers of Am. , 475 U.S. 643, 650 (1986) (inter nal quotation marks and notations omitted). 4. At the same time, it is fundamenta l that arbitration is a matter of conse nt. StoltNielsen S.A. v. AnimalFe eds Int’l Corp. , __ U.S. __, 130 S. C t. 1758, 1775 (2010). Indeed, “ar bitration is a matter of c ontrac t and a pa rty cannot be require d to submit to arbitration any dispute which he ha s not ag ree d so to submit .” AT & T Techs. , 460 U.S. at 648 (interna l quotation marks omitted). The district cour t may “not over ride the c lear

intent of the par

ties, or

rea ch a r esult inconsistent with the plain tex t of the contra ct, simply beca use the policy

favor ing arbitration is i mplicated.” Equal Emp’t Opportunity Comm’n v . W affle House, Inc

. , 534 U.S. 279, 294 (2002). “ After

all, the basic obje ctive . . . is not to resolve disputes in the quicke st

manner possible . . . but to ensure that commer cial ar bitration agree ments, like other contr acts,

are enfor ced a ccor ding to their terms.” First Options of Chicago, Inc. v . Kaplan , 514 U.S. 938, 947 (1995) ( internal c itation and quotation marks omitted). A. CSI B ears The Burden Of Establi shin g That The Parties In tended To Agree To The Mandatory Arbi tration Of Disputes 5. Be cause arbitration is a matter of c onsent, the g ener al pre sumption i n favor of arbitra bility simply “does not a

pply to the [t hreshold] determination of whe ther ther e is a va lid

25ag ree ment to arbitrate betwee n the par ties,” a que stion that is resolved by ref ere nce to or dinary state-law principles g overningthe formation of contrac ts. Institut Pasteur v. Chiron Corp. , 2005 6 WL 366968, at *10 (D.D .C. Feb. 16, 2005) (quoting Fleetwood Enters. Inc . v. Gask amp , 280 F.3d 1069, 1073 ( 5th Cir. 2002)); see also First Options , 514 U.S. at 943-44; Klaxon Co. v. Stentor Elec. M

fg. Co. , 313 U.S. 487, 496-97 (1941). I t is only afte r the district cour

t concludes that a binding ag ree ment to arbitrate exis ts that the presumption in favor of arbitra bility comes into effe ct. First Options , 514 U.S. at 944-45. Ac cording ly , the Court turns to the question of whether CSI , the par

ty who see ks to compel arbitration, has met its burden of esta blishing the exis tence of a ma

ndatory ag ree ment to arbitrate disputes betwee n the par ties, without the benefit of any presumption for or

ag ainst arbitra

bility

. B. The Arbitrat

ion C lause Is Am biguou s 7 6. Under

District of Columbia law, “the pa rty asser ting the e x istence of

a contr act has the burde n of provingits ex istence.” Bailey v . Fed. Nat’l Mortg. Ass’n , 209 F.3d 740, 746 (D.C. Cir. 2000) (c iting Eke dahl v. COREStaff, Inc. , 183 F.3d 855, 858 ( D.C. Cir. 1999) (per curiam)). In this contex t, that burden e x tends to proving that there was a n ag ree ment to all materia l terms and that the pa rties intended to submit to mandatory arbitra tion. Bailey , 209 F.3d at 745. CSI , as the pa

rty seeking to compel ar

bitration, conce des that it bear s the burden of proof

This Court previously

held that the Ag ree ment is gove rned by District of Columbia law, 6 PCH Mut. Ins. Co. , 569 F. Supp. 2d at 72-73, a conclusion only

further bolstered by

the evidenc e prese nted at trial, see Tr. at 55:17-55:21 (Condon Te st.). Although the Court previously held that the Ar

bitration Clause at issue her e is 7 ambig uous, PCH Mut. Ins. , 569 F. Supp. 2d at 74-77, a nd CSI conce des the point, see Tr. at 12:1-12:2, the Court shall revisit releva nt parts of its prior ana ly sis here, a s the text ual ambig uity nece ssarily

informs other a spects of its dec ision today

. 26of establishing the exist ence of an e nforc eable ag ree ment. Tr. at 5:25-6:3. F or the re asons set

forth below, CSIhas simply failed to mee t that burden. 7. When char g ed with construing the terms of a

contra ct, a c ourt should beg in with the text of the ag ree ment itself, g iving the la ng uag e chose n by

the par ties – which is presumed to be the most reliable indicator of the parties’ intent – its pl ain meaning

. Dye r v. Bilaal , 983 A.2d 349, 355 (D.C. 2009). The inquiry is an objective one : the court must deter mine what mea

ning a “re asonable person in the position of the par ties” would attac h to the disputed lang uag e. DLY

Adams Place

, LLC v. W aste Mgmt. of Md., Inc

. , 2 A.3d 163, 166 (D.C. 2010) ( internal quotation marks omitted). In pursuing this inqui ry , the cour t should consider the disputed lang uag e within the context of the entire c ontrac t, seekingto give eff ect to ea ch provision. Hunt Constr. Grp., Inc. v . Nat’l W

reck ing Corp. , 587 F.3d 1119, 1121 ( D.C. Cir. 2009). 8. A contra ct is not ambiguous mer ely beca use the pa rties disagree over its meaning or could have dra fted c lear er te rms. Tran ex rel. Estate of Le v. Carr , 708 F. Supp. 2d 1, 6 (D.D.C. 2010) ( citing Dist. No. 1-Pac. Coast Dist. v. Travelers Cas. & Sur. Co. , 782 A.2d 269, 274 (D.C. 2001)); see also In re Bailey , 883 A.2d 106, 118 (D.C. 2005) ( “none of the provisions at issue her e ar e ambiguous, althoug h the ag ree ment is poorly draf ted.”) . “The rele vant question is not whether the c ontrac t uses the most precise lang uag e a c ourt ca n imag ine ex post.” Hunt Constr. , 587 F.3d a

t 1122. I nstead, “ [a] contra ct is ambig uous when, a nd only when . . . the provisions in controversy are [] rea sonably

or fa irly susceptible to diffe rent c onstructions [or] interpre tations, or two or more dif fer ent meaning s.” DLY

-Adams Place , 2 A.3d at 166-67 (interna l quotation marks omitted and notations altered) ; accord Mamo v . Skvirsky , 960 A.2d 595, 599-600 (D.C. 2008). T he Court conc ludes that the Arbitration Cl ause is re asonably or

27fairly

susceptible to at lea st two differe nt constructions. 9. The Ar

bitration Clause provides a s follows: 17. Arbitrat ion. Any disputes conce rni n g an y as p ec t o f t his Agre ement may be submitt ed to binding arbitra tion

. T h e preva iling party shall be entitled to rec over all costs incurre d, including r easona

ble attorne y ’s fe es. Pl.’s Ex . 4 (Ag ree ment) ¶ 7. 10. CSI contends that re adingthe word “ may” in the Ar bitration Clause as per

missive would amount to no more than a barr en re cital that the par ties might in the future ag ree to arbitrate a dispute. Tr

ue, District of Columbia law doe s not require parties to employ any “mag ic words,” suc h as “ma

ndatory” or “ binding,” to establish an enf orce able, mandatory

ag ree ment to arbitrate. Bryson v. G ere , 268 F. Supp. 2d 46, 52 (D.D .C. 2003). CSI is also corre ct that, under District of Columbia law, “[i] t is a settled rule of c ontrac t interpretation that contrac t lang uag e should not be interpre ted to rende r the c ontrac t promise illusory or mea ningle ss.” Cagliot i v. Dist. Hosp. Partners, LP , 933 A.2d 800, 811 (D.C. 2007) ( quoting Retail Clerks Int’l Ass’n Local No. 455, AFL-CIO v. Nat’l Labor Relations Bd. , 510 F.2d 802, 806 n.15 ( D.C. Cir. 1975)). Ba sed upon this principle, the Courts of Appe als for the Four th and Eig hth Circuits have conclude d that the use of the word “ may ” did not rende r ce rtain ar bitration clauses pe rmissive beca use such a

n interpre tation would leave the clause devoid of mea ning. See U

nited States v. Banke rs Ins. Co. , 245 F.3d 315, 320- 21 (4th Cir. 2001); Am. Italian Pasta Co. v. Austin Co. , 914 F.2d 1103 ( 8th Cir. 1990); see also Detroit Edison Co. v. Burlington N . & Santa Fe Ry. Co. , 442 8 As explained in the Court’s prior opinion, the Arbitration Cl ause a t issue in this case 8 depar ts from the cla

uses consider ed by

these c ourts beca

use, in addition to providing that pa rties “may” submit disputes to bi nding a rbitration, it goe s on to provide that the par ty that preva ils in arbitration “shall be entitled to rec over a ll costs incurred, inc luding r easona ble attorne y ’s fe es.” 28F. Supp. 2d 387, 391 n.2 (E.D. Mic h. 2006) (sug g esting that if parties intende d to ag ree only to permissive ar

bitration, they

could have provided that “ either pa rty may seek r esolution of the question or controve rsy

pursuant to binding a

rbitration or through lit igation .”) ( emphasis in orig inal). 11. More pe rsuasively , CSI undersc ores that the A g ree ment also includes an I njunction Clause rese rving to PC H the rig ht to seek an injunction to enfor ce the Ag ree ment. Pl.’s Ex . 4 (Ag ree ment) ¶ 14. The re is some for ce to the a rgument that, unless the Arbitration Clause is rea d to require mandatory arbitra tion, there would be littl e re ason to expressly car ve out a rig ht to injunctive relief. Thoug h perha ps a close c all, g iven the re latively perf unctory lang uag e chosen by the par ties, the prese nce of

the Injunction Clause, and the a ppare nt (but not unresolvable ) anoma ly

that might re sult if the first sentence was re ad as me rely permissive, it is plausible to interpre t the Arbitration Clause a s an expression of a ma ndatory arbitration ag ree ment. 12. Neve rtheless, a s a g ener al matter of contra ct law, the w ord “ma y ” is viewe d as a permissive, rather than ma ndatory , term, par

ticularly when use d in contraposition to the word “shall.” See J

ama v. I mmigration & Customs Enforcement , 543 U.S. 335, 346 (2005); Ace Constructors, Inc. v. United States , 70 Fe d. Cl. 253, 288 (Fed. Cl. 2006), aff’d , 499 F.3d 1357 (F ed. Cir. 2007). Indeed, at least one c ourt within this Dis trict has per suasively held that the use of the wor d “may” in an a rbitration clause betwee n private pa rties “e vinces the pa

rties’ intent not

Pl.’s Ex . 4 (Ag ree ment) ¶ 17. As suc h, another plausible interpre tation of the ar bitration clause is that arbitration is permissive, not mandatory , but that if the parties a g ree to arbitrate , the loser pay s the winner’ s attorney s’ fe es. 29to be bound to invoke the ar bitration machiner

y to settle their disputes.” Group Hospitalizat ion & Med. Se rvs., Inc . v. Stubbs , 1990 WL 183576, at *2 (D.D .C. Nov. 16, 1990). 13. Significa

ntly , the first sentenc e of the Arbitration Clause at issue here provides that any dispute conce rning the Ag ree ment “ may be submitted to binding ar bitration,” while the second se ntence provides that the pa rty that preva ils in arbitration “ shall be entitled to re cover all costs incurre d, including r easona ble attorne y ’s fe es.” Pl.’s Ex. 4 (Ag ree ment) ¶ 17 ( emphasis added) . The Court conc ludes that the provision may rea sonably

be re ad mer ely

to contemplate the possibilit y

of ar bitration, without mandating its use. Unde r this interpretation, only wher e the parties voluntar ily

elec t to procee d to arbitration does the provision’s mandatory eff ect c ome into play : in such circumstanc es, the provision would re quire the losingparty to pay the pre vailing party ’s costs and attorney s’ fe es. In other wor ds, construing its plain langua g e fr om an objective point of view, the Ar

bitration Clause may

be see n as little more than a f ee- shifting pr ovision. 14. I n Flynn v. O hio Bldg. Restoration, Inc. , 260 F. Supp. 2d 156 (D.D .C. 2003), the court a ddresse d a provision with a similar structure in concludingthat the par ties had not ag ree d to the use of mandatory

g rieva nce pr ocedur es. Ther e, the r eleva nt contrac tual lang uag e provide d: A char g e of violation of this Ar t i cl e . . . may be filed by the Union and/or the trustees of any of the joint trust funds provided for in this Ag ree ment, and shall be c onsidered a dispute under this Agre ement and shall be proce ssed in acc ordanc e with the proce dures f o r handling of g rieva nces a nd the final binding resolution of disputes. Id. at 163 (e mphasis added) . The c ourt construe d the interplay betwee n the words “ may ” and “shall” a s merely

requiring , in the event the Union or the trustee s “exercise [d] their discre tion to initiate the arbitration procedur es, [that] any such cha rg e must then be proc essed a ccor ding to the g rieva nce pr ocedur es set for

th in the CBA.” Id. at 166. L ikewise, the A rbitration Clause at issue

30here may

fairly be re ad to have a mandatory eff ect ( in requiringthe shifting of fee s) only

afte r the parties ha ve voluntarily

decide d to liti g ate their

disputes before an ar

bitral body

. 15. The re asonable ness of this construction is supported by the fa ct that, elsewhere in the Ag ree ment, the par

ties proved themse lves ca pable of draf ting ter ms with clear binding

eff ect, most often throug h the use of the word “ shall.” See, e .g. , Pl.’s Ex . 4 (Agree ment) ¶¶ 3, 5-8, 10, 12; cf. Raytheon Eng’rs & Constructors, Inc. v. SMS Shloe mann-Siem ag Akienge sellschaft , 2000 WL 420866, at *3 (N.D . I ll. Mar. 16, 2000) (if the par ties intended to g rant one another the unilatera l rig ht to impos e ar bitration, separ ate pr ovisions providing for unilatera l rig hts evidenc ed that they

knew how) . I t is also consonant with the parties’ proven a bility to combine discretionar

y rig hts and mandatory

obligations through the inter play of the wor ds “may” and “shall.” See, e .g. , Pl.’s Ex . 4 (Ag ree ment) ¶¶ 4, 9. 16. Other a spects of the Arbitration Clause de monstrate fur ther ambiguity

as to whether the par ties intended to provide f or mandatory

arbitration of disputes. The clause does not identify

the ar bitrator, a me thod for choosingthe ar bitrator, or a

place of ar

bitration. Whi le this shortcoming doe s not nece ssarily prove that the parties did not re ach a “mee ting of

the minds,” it is probative of whethe r the pa rties ac tually

considere d or ag ree d upon all materia l terms of a n ag ree ment to arbitrate

. Cf. PainW ebber I nc. v. Chase M

anhattan Private Bank ( Switzerland) , 260 F.3d 453, 463 ( 5th Cir. 2001) (conc luding that f ailure to identify

g eog raphic location for a

rbitration or the a

rbitral for um “simply

leave s too many

critica l elements unaddre ssed to support [t he] contention that the . . . Ag ree ment, standing alone, amounts to a binding a rbitration ag ree ment betwee n the par ties.”). 17. The Court there fore conclude s that the Arbitration Cl ause ma y rea sonably

be re ad

31simply

as a pe rmissive arbitration clause, c oupled with a fe e-shiftingprovision. I n fac t, give n the provision’s use of the w ord “ma y ,” conside red a longside the par ties’ prove n ability

to draft lang uag e unequivoc ally

establishing bindingrig hts and obligations, the Court is i nclined to conclude that this is t he most rea sonable re adingof the Ar bitration Clause. Howe ver, ba sed upon the languag e of the Arbitration Clause a lone, the Court ca nnot determine which of these interpre tations is correc t as a matter of law. C. The Preponderance O f The Extrins ic Evidence Does Not Establish That The Parties Intended To Su bm it To Mandat ory Arbitrati on 18. Wit hout a “mee ting of the minds” as to all mater ial terms, there can be no enfor cea ble contra ct. Bailey , 209 F.3d a t 746 (citing Jack

Bake r, Inc. v . Office SpaceDev . Corp. , 664 A.2d 1236, 1238 (D.C. 1995)) ; see also Restatement (Sec ond) of Contrac ts § 201(3) (1981) (whe re pa rties to an agree ment attache d differ ent meaning s to a term ther eof, a nd neither pa

rty had re ason to know of the me aningattache d by the other, “ neither pa

rty is bound by

the meaning attache d by

the other, e ven thoug h the re sult may be a f ailure of mutual assent.”)

. 19. Once a cour

t determines that a

contra ct is ambig uous, the court may look to any extrinsi c evide nce de monstrating the intent of the par ties at the time of contr acting

. Dye r , 983 A.2d at 355; see also Eke dahl , 183 F.3d at 858 (“Proof of a mee ting of

the minds may

be found either in the written ag ree ment or, if the a g ree ment is ambiguous, in the pa rties’ a ctions at the time of contra ct formation.”). Indeed, “ [w] here an ambiguity is present, the intent a

nd understandingof the pa

rties is of cr itical importance .” Howard Univ. v. Lacy , 828 A.2d 733, 737 (D.C. 2003). Unde r District of Columbia law, e x trinsic evidenc e may include (a ) the circ umstances surr ounding the making of the c ontrac t, including pr eliminary neg otations and discussions, (b) customary prac tices of whic h either pa rty knows or has r eason to know, a nd (c) 32the cour se of c onduct of the pa rties under

the contra ct. In re Bailey , 883 A.2d at 118. Eve n here , howeve r, the foc us remains on what a re asonable person in the position of the par ties would have thought the disputed la

ng uag e mea

nt. Dye r , 983 A.2d at 355. 20. As set forth a

bove, the r ecor d is clear : nobody dedicated much attention to the Ag ree ment; there w ere no contempora neous discussions reg ardingthe Arbitration Cl ause; a nd the only evidenc e having

any bear ing upon the parties’ interpre tation of the Arbitration Cl ause relates only

to CS I ’s profe ssed under standing , which wa s never conveyed to PCH or any of its repr esentatives prior to execution of the Ag ree ment. CSI conce des, as it must, that there is no evidenc e on the r ecor d establishing one way or the other

whether PCH int ended or

understood the Arbitration Cl ause to re quire mandatory arbitration. Tr. at 146:3-146:19. F or obvious

9

rea sons, the minimally

persua sive testimony

from Godf

rey and Condon that they

unilatera lly understood the Ar

bitration Clause to require mandatory arbitration cannot establish a sha red intention or a mee ting of

the minds betwee n CSI and PCH. Recog nizi ng this, CS Iresor ts to various ar g uments, some more ha lf-bake d than others, in support of its contention that the pa rties intended to ag ree to mandatory arbitration, none of which a re of any avail. The Court addre sses

I t is not entirely

clea r whe ther CSI ’s “pr omoter” the ory , discussed in g reater de tail 9 below, is meant to enc ompass an ar g ument that Ba rrick or Risk S ervic es’ intent may be imputed to the future PCH. To the e x tent CSI intends to sugg est that Ba rrick should be viewed a s repr esentingthe future PCH in t he cour se of dr aftingthe Agree ment, the Court has re jected tha t sug g estion. Reg ardle ss, the rec ord is clea r that B arr ick made no c hang es and of fer ed no commentar

y to the Ag ree ment. Simi larly , to the extent C SIintends to sugg est that Risk S ervic es should be viewe d as re prese nting the f uture PCH in the course of dra fting the Ag ree ment, the Court has reje cted that c ontention as well. Not only did Condon admit t hat he did not view Risk Service s as neg otiating on be half of PCH, but the re cord doe s not permit the infere nce that any one of the three principal e ntities invol ved in the proc ess of for ming PCH – CSI , Risk S ervic es, and PCAL I C – was more of a “r epre sentative” to PC H than the other s. I n any event, ther e is no evidenc e that Risk Services unde rstood the Arbitration Cl ause to re quire manda tory arbitration either. 33eac h in turn.

21. CSI first argues that ar bitration clauses a

re the norm in the insuranc e industry

. Gene rally , an industry

custom or pra ctice must be “ definite, unifor m, and well known, a

nd it must be established by

‘cle ar a nd satisfac tory

evidenc e.’” Howard Univ. v. Be st , 547 A.2d 144, 151 (D.C. 1988); W

eave r v. Du Pont , 119 A.2d 716, 716 (D.C. 1956); accord Law Debenture Trust Co. of New Y

ork v. M averic k Tube Corp. , 595 F.3d 458, 466 ( 2d Cir. 2010) (apply ing N ew York law ). Simply

put, CS Ihas fa iled to prove, by a pre pondera

nce of the evidenc e, that ther e is any custom or pra ctice c oncer ning the use of a

rbitration clause s in this contex t, let alone one sufficie ntly

“def inite, uniform, and we ll known” to justify its use as extrinsi c evide nce of the parties’ intent. See D iskin v. J.P. Ste vens &Co., Inc. , 836 F.2d 47, 51- 52 (1st Cir. 1987) (applying N ew Yor

k law, conc luding that pa rty could not establish arbitration was customary method of re solving disputes throug h vague and unspe cific e vidence ). 22. CSI next arg ues that the a bsence of extrinsic evidence is of no moment merely by virtue of the f

act that r epre sentatives of CSIand PCH signe d the Ag ree ment. The a rgument is perple x ing. T rue, a

meetingof the minds may be evide nced by

the terms of a

signe d written ag ree ment, Davis v. W

infield , 664 A.2d 836, 838 (D.C. 1995), but that truism is of no use her e g iven the pate nt ambiguity in the Arbitration Clause. Cf. Bryson , 268 F. Supp. 2d at 52 (a lthough arbitration clauses nee d not expressly state that they

are “manda

tory ,” ther e must never

theless be “other indications” of a

n intent to consent to binding a rbitration). The same holds true f or CSI ’s curious ar g ument that principles of e quitable estoppel pre clude a ny eff ort by PCH to sugg est that the Ag ree ment is unenforc eable on the g rounds that PCH had y et to be for med as of the date of the Ag ree ment. I n eff

ect, both ar g uments begthe question. PCH has never claimed that it is not

34bound by

the Agree ment or, more spe cifica lly , the Arbitration Cl ause; rather, it has simply maintained that the Ar

bitration Clause does not re quire binding arbitration, and CSI has not adduce d any

evidenc e sug g esting that the par ties’ share d understandingwas other wise. 23. Even c onsideringall of the e x trinsic evidenc e on the r ecor d, the Court cannot conclude that a re asonable person in the position of the par ties would have c onstrued the Arbitration Clause a s requiringarbitration of the parties’ disputes. CS Ihas simply fallen woef ully short of establishing , by

a pre pondera

nce of the evidenc e, that ther e wa s a “me eting of the minds” betwe en CSIand PCH as to the nature of the Ar bitration Clause. Ther e beingno “mutual conse nt on the issue, there [can] be no binding contr actua l commitment.” Local Union 1395, Int’l Bhd. of Elec. W orkers, AFL-CIO v . Nat’l Labor Relations Bd. , 797 F.2d 1027, 1036 (D.C. Cir. 1986); see also ISC Holding AG v . Nobel Biocare Inv s. N.V. , 351 Fe d. Appx. 480, 481 (2d Cir. 2009) (summar

y order ) (“ Wit hout a meetingof the minds such that an e nforc eable ag ree ment to arbitrate was for med, we w ill not compel arbitration.”) . Acc ording ly , by operation of the Saving s Clause and substantive fe dera l arbitration law, the Arbitration Clause in ef fec t drops out from the Agree ment. See Rent-a- Center, W ., Inc. v . Jack

son , __ U.S. __, 130 S. C t. 2772, 2778 (2010) ( as a matter of substantive f eder al ar bitration law, an a

rbitration provision is

sever able f

rom the re mainder of

the contra ct). D. CSI C

annot Salvage Its Motion By Resort To The Doctrine Of Contra P rofere ntem 24. Under

the doctrine of contra proferentem , “any ambig uity

as to [a] contra ct’s meaningwill be construed strong ly ag ainst the draf

ter.” Dye r , 983 A.2d at 355; see also Mastrobuono v. Shearson Lehman H utton, Inc. , 514 U.S. 52, 62 (1995) (addr essing the doctrine within the context of feder al ar bitration law). “ This canon of construction . . . is a ‘se condar y ’ 35standard of interpre tation, and infer ior to ext rinsic proof of the par ties’ ag ree ment, or to other authority reve aling that understanding .” Am. Bldg. Maint. Co. v. L’Enfant Plaza Props., Inc. , 655 A.2d 858, 863 (D.C. 1995) ( internal c itation and quotation marks omitted); accord In re Bailey , 883 A.2d at 118. 25. The rationale under g irding the doctrine has bee n aptly descr ibed as follows: Where one party chooses the terms of a contra ct, h e i s l i k ely to provide more car efully for the protec tion of his own interests than for those of the other party . He is also more likely than the other party to have rea son to know of unce rt ai n t i es of meaning

. I ndeed, he may leave meaning deliberately obscure , intending to decide at a later date what meaning to asser

t. In case s of doubt, there fore , so long as other fac tors are not de cisive, there is substantial rea son for pref err ing the meaningof the other

party . Restatement (Sec ond) of Contrac ts § 206 cmt. a; see also Mastrobuono , 514 U.S. at 63 (“The

rea son for this rule is to protec t the party who did not choose the la ng uag e fr om an unintended or unfair r esult.”). 26. Clearly , the doctrine cannot be invoked ag ainst PCH on the basis that it di rec tly draf ted the Ag ree ment (or, more specific ally , the Arbitration Cl ause) . The re cord suppor ts only

one conc lusion: P CH had no direc t role in selec ting the la ng uag e for

the Agree ment betwee n it and CSIor, for

that matter, in dec iding to use the Intermodal Ag ree ment as a ba se for draf ting the Ag ree ment. There fore , PCH cannot be said to be the draf tsman of the Ag ree ment; indeed, it was hardly a par ticipant. 27. Nor doe s CSI appea r to sug g est otherwise . I nstead, CSI ’s principa l argument (so far as the Court ca

n tell) is as follows: non-par ty Risk S ervic es dra fted Agree ment; Risk S ervic es

was a “promoter ” of the future PCH; there fore , Risk S ervic es’ r ole as the “ draf tsman” of the Ag ree ment should be imputed to PC H and the doc trine of contra proferentem require s the 36Arbitration Clause to be inter prete d in CS I ’s favor. F or seve ral re asons, the ar g ument is without merit. 28. As an initial matter, to the Court’s knowledg e, no Court has e ver e x tended the “promoter ” theor

y to invoke the doctrine of contra proferentem under c ircumstance s such as those prese nted her e. Unde r ce rtain circ umstances, pr eliminary contra cts executed on a corpor ation’s beha lf by

its ag ent bef

ore the corpor ation formally comes into exist ence may be imputed to the corpora

tion’s “promoter” or vice versa . See generally Richard A. L ord, W

illis ton on Contracts § 35:71 (4th ed. 2010). He re, CSIag ain misconstrues the nature of PCH’s objections to arbitration. PC H has ne ver c laimed it is not bound by the Ag ree ment in toto ; it simply has prof fer ed an a lternative, a

nd entirely

rea sonable, interpr etation of the A rbitration Clause. More to the point, the “ promoter” theory has no application here be cause the Ag ree ment

was e x ecute d by

Har vey , who subsequently

beca me the first pre sident of PCH and a membe r of its Boar d of Dire ctors, and not a nyone fr om Risk S ervic es. 29. I n any

event, CSI ’s ar g ument fails at the outset for the simple rea son that the

rec ord does not support the c onclusion that Risk S ervic es dra fted the A g ree ment betwee n CSI and PCH. Apart f

rom some superf

icial edits that Har

kavy may or may not have made to the Ag ree ment, Condon, on behalf of CSI , was the only

individual to make chang es to the Ag ree ment. Fur

ther, to the e x tent the Intermodal Ag ree ment is even re levant, the or igins of the lang uag e used in that a g ree ment are indeterminate

. See Champagne v. Vic tory Home s, Inc. , 897 A.2d 803, 806 n.5 (Me. 2006) (doctrine of contra proferentem could not be invoked whe re

rec ord wa s silent as to who draf ted ar bitration provision); Nadherny v. R oseland Prop. Co., Inc. , 390 F.3d 44, 51 ( 1st Cir. 2004) (doctrine of “no utility ” whe re “ unclea r who dra fted the

37contra ct”) . There are , of cour se, instance s in which it cannot be de termined that one party rathe r than the other

chose the specific words of the contra ct, and this is one of them. B ased on the

rec ord cr eate d by

the par ties, there simply

is no evidentiary

basis for the Court to conc lude that Risk S ervic es wa s the draf tsman of the Ag ree ment, or its Arbitration Clause. 30. Moreove r, Condon had the c apac ity to (and in fa ct did) make chang es to the Ag ree ment on CSI ’s beha lf. In fac t, he was the only individual to make substantive chang es to the Ag ree ment. I n addition, while Risk S ervic es wa s the first to sug g est using the I ntermodal Ag ree ment as a te mplate for the Ag ree ment betwee n CSI and PCH, the rec ord evide nces that CSI , throug h Condon, sanctioned and in f act e ndorsed its use. Unde r these c ircumstance s, there is no credible c oncer

n that CSIwas somehow unpr otected f rom an unintende d or unfa ir interpre tation of the chose n lang uag e such that would justi fy invoking the doc trine of contra proferentem

. See Transformational Strat egies Consulting, Inc. v. ACS State He althcare, LLC , 526 F. Supp. 2d 66, 71 n.5 (D.D .C. 2007) (applying N ew Yor k law, conc luding that a

mbiguities could not be construe d ag ainst the draf ter of the parties’ initial agr eeme nt where both parties participated in the dra fting of the amendment). 31. Finally , even a ssuming, arguendo , that Risk S ervic es could be deeme d the exclusive draftsman, CSIhas not shown that Risk Services wa s opera ting a s the “promoter ” of the future PCH in t he conte x t of draf ting the A g ree ment betwee n CSI and PCH. Gene rally speaking , “promoter s” ar e def ined as individuals who take a n active pa

rt in org anizing a corpor ation prior to its coming into being

. Shoreham Hote l Ltd. P’ship v. W ilder , 866 F. Supp. 1, 4 (D.D.C. 1994); see also Jones v . Health Res. Corp. of Am. , 509 A.2d 1140, 1146 n.15 (D.C. 1986) (pr omoters proc ure f or the futur e cor

poration the rig hts, instrumentaliti es, and c apital to

38enable it to do busi ness). As pr eviously indicated, Condon re adily conce ded that he did not view Risk S ervic es as ne g otiating on be half of PCH in the conte x t of draf ting the A g ree ment, and the

rec ord does not per

mit the inferenc e that any one of the three principal e ntities invol ved in the proce ss of formingPCH – CS I , Risk S ervic es, and PCAL I C – was more of a “r epre sentative” of PCH than the others. I f any thing, the Court would be inclined to conclude that CSI – whose principal e x tended a

$130,000 loan to PCH to ensure that it would have suf ficient c apital for its formation – is the most viable ca ndidate for

so-ca lled “promoter ” status. 32. For

all these re asons, the Court conc ludes that the doctrine of contra proferentem has no applica

bility to the prese nt Motion.

IV. CONCLUSION The Court has c onsidered the rema ining a rguments tendere d by

the par ties and has conclude d that they

are without merit. Accor dingly , based upon the fore g oing F indings of F act and Conclusions of L aw, the Court sha ll DENY CSI ’s [8] Motion to C ompel Arbitration and Stay Procee dings. A n appropr iate Or der a ccompa nies these F indings of F act a nd Conclusions of L aw.

Date: November

15, 2010 /s/ COLLE EN KOLLAR-K OTEL LY United States District J udg e

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